Reaching Japan's markets - growing demand for leisure products

Nation's Business, Sept, 1992

A nation's growing interest in leisure time; JETRO's new president; quidelines to a culture.

For nearly the last 50 years, the Japanese typically have worked long hours with only brief vacations.

But now that they've built an economy of more than $3 trillion and earn an average of about $30,000 a year, they are at last beginning to relax a little.

The average number of hours worked annually by Japan's 123 million people declined from 2,120 in 1987 to 2,006 last year, according to a recent government report. In the same report, work hours are projected to fall to about 1,800 by the end of the decade.

This trend in Japan toward spending less time at work is good news for potential U.S. exporters in the sporting-goods and leisure industries.

Ask John Ducate Jr., president of the Ducane Co., based in Columbia, S.C. Eighteen years ago, when Ducate and his wife, Mary, honeymooned in Tokyo, the Japanese seemed interested only in working, he says. However, when he recently returned at the invitation of the Japan External Trade Organization (JETRO) and assessed the Japanese market for his firm's luxury gas cooking grills, he discovered that ifs not the old Japan anymore."

Everywhere he went during JETRO's Export to Japan Study Program, Ducate noted, the Japanese seemed to be saying, 'I've worked very hard, and now I want more time for myself.'"

For Ducate, this shift in attitude translated into a distribution agreement with Tokyo-based Daishin Sangyo Ltd., Japan's largest producer of automotive brakes. Ducate has begun shipping grills to his firm's Japanese partner.

Interestingly, Ducate notes that the high price of his grills--over $1,000 apiece--may be a positive factor in marketing them in Japan. Daishin Sangyo's promotional material, distributed among what Ducate calls "high-end clientele," is aimed at creating what the Japanese call akogare. That translates roughly as a yearning for a product perceived as a status symbol. Ducate notes, however, that the Japanese expect high-price products to be of high quality, and he says his company has an edge in that regard also.

Says Ducate: "We don't get many complaints [about our products], but when we do, something always happens to make it right. Quality is our most important asset, and I remind our workers of that all the time."

Of course, barbecue grills are but one of countless leisure and sporting goods for which Japanese have developed akogare. It's difficult to gauge how large the entire Japanese sports and leisure market is because it potentially includes so many products. However, the U.S. Department of Commerce says that the sporting-goods segment alone was a $14.1 billion market in 1991, with U.S. imports totaling $365 million.

The import market for sporting goods has grown by 6 percent a year for the past several years and is expected to continue growing--although at a slower rate--through the 1990s, according to a Commerce Department official.

While the sporting-goods market consists of more than 20 product categories under the Commerce Department's definition, five categories total more than 60 percent of the market: golf; skiing; outdoor activities such as mountain climbing, camping, and cycling; sporty casual wear; and training clothes and shoes.

Notes Kazuhisa Takabatake of the U.S. and Foreign Commercial Service office at the American consulate general in Osaka-Kobe, Japan:

"There are almost no tariffs, import quotas, and regulations in the Japanese sporting- and leisure-goods market that hamper imports from the U.S.

"For small to midsized U.S. companies, the difficult but important step for market entry is finding a good partner who has experience in and knowledge of the Japanese distribution system, and who also is capable of providing information on Japanese end-users."

If you are interested in exporting a leisure or sporting-goods product to Japan, call the Commerce Department's Japan Export Information Center, (202) 377-2425, for relevant information such as a copy of Equipment for Leisure/Resort Facilities in Japan. This report was prepared for the American Embassy in Tokyo by Fuji Keizai Co., Ltd.

In addition, you should contact JETRO at (212) 997-0400 for its excellent industry reports.

For more sources of information on ways that your firm can reach Japan's market, see "Japan Offers Help To U.S. Exporters," on Page 59, and the accompanying box, on Page 60.